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AFE2123 22 October 2020

Read and understand the following passage.

WHAT IS MUAMALAT?

Muamalat is set of rules also known as “fiqh” which related to worldly matters such as business, trading, commerce, transactions, lending and borrowing contracts. Muamalat also involves the rules regarding the social interactions between human such as marriage, inheritance like “waqaf” and “faraidh” and other human activities. Nowadays, muamalat is always associated to economics and finance since these elements are the key for happiness in this world and hereafter.

As a Muslim, we are believed that all the wealth on this world are belonged to Allah. Humans are only the appointed trustees to manage and distribute the wealth among them. Humans are encouraged to seek wealth through knowledge and skills given by Allah. The rules and practices of “fiqh” muamalat are derived from two primary sources which are from the Holy Quran and Hadith of Prophet Muhammad S.A.W.

There are other secondary sources of Islamic law which are collective opinions agreed among Shariah scholars (Ijma’) such as the four school of Fiqh. Firstly, from Hambali, Maliki, Hanafi and Shafie. Secondly is from Analogy (Qiyas). Next is Personal Reasoning by Ulama’ (Ijtihad) and lastly from Traditions and Customs (as long as it is not in conflict with Shari’ah).

There are requirement of Shari’ah laws in practicing businesses transactions which are not producing and trading of illicit materials (swine, liquor, stolen goods), not producing and trading of materials which are of no use, gharar (uncertain), any business or transactions that contains element of riba and involvement of gambling elements

Source: https://en.wikipedia.org/wiki/Muamalat

http://muamalat-islam.com/p/overview-of-muamalat.html

Exercise 1

Find the best synonym for each of the word. Match Column A to Column B.

Exercise 2

Fill in the blanks with suitable vocabularies given.

1. Turkestan is a good wheat- _________________ country where cereal were actually imported.

2. The new manager brings a great _____________ of experience to the job.

3. Certain banks make a special business deal of ______________ money to owners of property.

4. Supermarkets everywhere reported excellent ______________ in the sales up to end of the year.

5. The council meets once a week for the ________________ of the government business.

6. What is the minimum entrance ______________ for this course?

7. Your library will be a useful _____________ of information when it comes in doing your assignments later.

8. Many first-time home buyers are ______________ thousands of Euro from their local banks.

9. They are servants of the government and do not become involved in _____________ unless supporting official trade missions.

10. The donor appoints ______________ who can decide when the assets are distributed to the beneficiaries.

Exercise 3

Identify the errors in the sentences and write the correct answers. Errors exist in the bold sentences only.

Bank Muamalat Malaysia Berhad are one of the two independent (0) is

full-fledged Islamic Financial Institutions in Malaysia. The bank

were established on 1st October 1999 from the combination of (1) _______________

Islamic Banking division’s assets and liabilities of three local

banks, namely Bank Bumiputra Malaysia, Bank of Commerce

(Malaysia) and BBMB Kewangan. The shareholders for the bank (2) _______________

comprise of DRB-HICOM which holds 70% shares in the bank

with khazanah nasional berhad holding the remaining shares. (3) _______________

Being among the pioneer of Islamic banking, the Bank is strongly

supported by Shariah’s scholars who is highly qualified and (4) _______________

experienced in the Islamic jurisprudence, advising not only in

issues pertaining to Shariah products and service but also as advisor (5) _______________

to parties that are planning to raise Islamic Capital Issues or other new

innovative products.

The bank have a nationwide network of 63 branches, a kiosk and an (6) _______________

offshore Labuan branch that provides wide range of Islamic banking

products and services included foreign currency deposits, (7) _______________

investment accounts, foreign exchange trading, working capital

financing, trade financing, project and contracting financing, venture (8) _______________

capital and Islamic capital market services to both Malaysians and

foreigners.

A Bank is a member of Global Alliance for Banking Values (GABV), (9) _______________

an independent network of banks and banking cooperatives

worldwide operating under the “Principles of Sustainable Banking”.

GABV focuses on the returns of real economy and acts as financial

intermediary to support social and environmental impacts. Bank

Muamalat Malaysia Berhad is the first Islamic Bank to be accept as (10)______________

its member.

Common Terms in Muamalat

1. Musharaka
   Akad between the two owners of capital or more to unify its capital on a certain business, while the executors could be appointed one of them. Akad is applied to the business / project partly financed by financial institutions, while the rest is financed by the customer.

1. Wadi'ah
   The contract between two parties, where the first party entrusts an item to the second party. Financial institutions apply this agreement on a checking account.

1. Ijarah
   Akad lease of goods between the two sides, in order to obtain the benefits of goods leased. Akad rent incurred between financial institutions (the owner of the goods) with the customer (lessee) to lease installments which already includes the main installments of the price of goods so that at the end of the agreement period tenants can buy goods with the rest of the price is little or given only by the bank.

1. Kafalah
   Akad guarantee one party to another. In the financial institutions are usually used to make a warranty on a project (performance bond), participation in the tender (tender bond) or the first payment (advance payment bond).

1. Salam
   Sale and purchase by way of reservation, where the buyer gives the money in advance for goods that have been mentioned specifications, and goods shipped later, Salam usually used for agricultural products short term. In this case the financial institution acting as a buyer of products and give the money first while customers use it as capital to manage the farm.

1. Riba (Usury)

Al-Jassas defines riba as a loan given for a stipulated period with stipulated increase on the principal payable by the loan-taker. Riba also defined as “an increase that has no corresponding consideration in an exchange of property for property.

1. Gharar (Uncertainty)

Gharar or uncertainty makes a transaction un-Islamic as it will result in an unjust or unfair outcome for the parties involved. It is where the quantity and the quality involve in the transaction is not predetermined and known which may makes the contract void or voidable.

1. Maisir (Gambling)

The word maisir means getting something too easily or getting a profit without working for it. Islam forbids all forms of business in which the monetary gain comes from mere chance or speculation and not from work. Unlike gharar which is tolerated to a certain degree, maisir is not accepted at all.

In your email, write your answers as following :

EXERCISE 1

Example : 1. wealth – rich

2.

EXERCISE 2

1. Wealth

2. commerce

EXERCISE 3

1. was

2. banks